Variation, replication and selection in evolving industries

Purpose – Variation, replication and selection processes are acknowledged as key constructs in studies on how industries evolve, but no theoretical and empirical contributions have applied these key constructs to analyzing industries in specific stages of their history. This paper aims to fill this gap, taking for reference the firm and its strategic action in particular. Design/methodology/approach – After delineating and discussing the three processes of interest – variation, replication and selection – this paper analyzes three very different evolutionary contexts: “red” industries, that reached maturity maintaining a polypolistic structure, and that continue to evolve in this phase; the oligopolistic transformation undergone by certain industries; and the emergence of new market spaces around new products developed by firms. Findings – Variations are mainly reactions to the competitive environment in the evolution of red industries or environment-modifying in the case of industries evolving toward an oligopoly, and in the creation of new market spaces. Horizontal replication through employee mobility prevails in red industries, while in the other two contexts firms driving the evolution raise barriers to replication, inhibiting both horizontal and vertical replication. While selection does not come about in a new market space as long as the barriers erected by the first comer remain in place, it occurs in the form of subset selection in the other two settings. Originality/value – This paper takes an entirely novel approach and proposes a pluralist framing of how industries evolve, interpreting the different evolutionary situations on the strength of the key variables of variation, replication and selection.